Amendment to the Enforcement Decree of the Local Tax Act to Protect Residential Tenants and Alleviate Taxpayer Burden

Revised Bill Passed at Cabinet Meeting on the 21st

[Asia Economy Reporter Jo In-kyung] The Ministry of the Interior and Safety announced that the 'Partial Amendment to the Enforcement Decree of the Local Tax Act,' which protects the rights of housing tenants and reflects institutional improvements, passed the Cabinet meeting on the 21st.

The amendment first reflected the revised requirements for rent increase restrictions under the 'Private Rental Housing Act' in the preferential tax conditions for rental business operators to protect the rights of housing tenants. For rental business operators, in addition to the existing condition of rent increases being limited to 5% or less per year, it was stipulated that no additional increase is allowed within one year, and when converting between rental deposits and rent, the conversion standard was specified to be within 4.25% per year (Bank of Korea base rate 0.75% + 3.5%).

When foreign corporations receive an extension for the corporate local income tax filing deadline, the interest rate for the extended period was lowered to the interest rate applied when a refund occurs (1.8% per year). Previously, if the filing deadline for corporate local income tax was extended due to unavoidable reasons such as delayed settlement at the head office overseas, a high penalty interest rate for non-payment (9.1% per year) was applied, which was criticized as unreasonable.

For non-business land and real estate in speculative areas, although opportunities for final reporting were granted without legal grounds when there were errors in the report contents, the amendment established clear legal grounds for this.

Additionally, in cases where refunds of locally collected income tax occur, regulations regarding the local governments responsible for issuing such refunds were clarified. Under the current Local Tax Act, the tax payment location for local income tax follows the tax payment location under the Income Tax Act and the Corporate Tax Act, while the payment location for special collection is separately stipulated. However, the enforcement decree does not separately regulate the refund location, so this was improved to align with the special collection payment location.

Ko Gyu-chang, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, said, "We hope this amendment to the enforcement decree will contribute to protecting the rights of housing tenants and correct some unreasonable or unclear matters, thereby eliminating confusion for taxpayers and tax authorities."

This content was produced with the assistance of AI translation services.